For Landlords: Screening Applicants Based on Criminal History

Hey Y'all! HUD put out some new guidelines about using criminal history in housing transactions, and it looks like a big departure from where Wisconsin's been headed, lately. I'm walking through it today, on behalf of landlords trying to sort out what's what.

All of you guys out there sitting reading this are likely just trying to find a balance of needs: yours, those of your tenants, and those of the prospective tenants. It's purty darn complicated.

We've talked to a lot of landlords over the years, and one of the regular things we tell folks is that: it's a really great idea to have a list of policies, about who you let in, who you evict, and what you need from tenants while they're living on your property (see #3 here). Policies that say, "here's my top criteria, and here are exceptions that I'm willing to make." To be clear, the new HUD rules talk about what kind of criteria that landlords need to have, in regards to criminal history, and if I had to guess, I'd imagine that most of you sitting there reading this honestly have something pretty close already.

The basic premise is this: In the US, African Americans and Hispanics are arrested, convicted and incarcerated at a rate disproportionate to the general population. ("Across all age groups, the imprisonment rates for African American males is almost six times greater than for White males, and for Hispanic males, it is over twice that for non-Hispanic White males.") Therefore, any policy that screens housing applicants based on their criminal history is likely to have a "disproportionate impact on minority homeseekers," even if the landlord had no intent to discriminate. (Disproportionate/disparate impact is a big deal in Fair Housing Law - it's the basis by which things can be legally classified as discriminatory.)

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HUD says that if landlords are going to exclude someone from housing (not just applicants; also current tenants), they need to have a pretty clear, defensible, evidence-based policy for why they'd do so. Here are the components:

Your Screening Policy Can't:

Deny all prospective tenants with any kind of criminal conviction."A housing provider that imposes a blanket prohibition on any person with any conviction record – no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then – will be unable to meet this burden [of showing that such policy or practice is necessary]."

Deny tenants based on arrests, not convictions. If a person has not been convicted of a crime, then an arrest record is not enough to deny someone housing. "A housing provider with a policy of excluding individuals because of one or more prior arrests (without any conviction) cannot satisfy its burden of showing that such policy or practice is necessary."

Make any decisions to deny based on criminal history or make exceptions to criminal history denials based on race, or other protected classes. (That's illegal). "For example, intentional discrimination in violation of the [Fair Housing] Act may be proven based on evidence that a housing provider rejected an Hispanic applicant based on his criminal record, but admitted a non-Hispanic White applicant with a comparable criminal record. Similarly, if a housing provider has a policy of not renting to persons with certain convictions, but makes exceptions to it for Whites but not African Americans, intentional discrimination exists."

Your Screening Policy Must:

Distinguish between what kinds of criminal history is acceptable, and what kind is a risk. "A housing provider must show that its policy accurately distinguishes between criminal conduct that indicates a demonstrable risk to resident safety and/or property and criminal conduct that does not."

Take into account how long ago a conviction occurred."A policy or practice that does not consider the amount of time that has passed since the criminal conduct occurred is unlikely to satisfy this standard, especially in light of criminological research showing that, over time, the likelihood that a person with a prior criminal record will engage in additional criminal conduct decreases."

Distinguish between how severe past crimes were, and what kinds of crimes they were."A policy or practice that fails to take into account the nature and severity of an individual's conviction is unlikely to satisfy this standard."

Have some kind of evidence-based justification for existing.Why is this policy justified? Why is it necessary to screen applicants based on criminal history? Is there another way to screen applicants that would have less of a disparate impact on minorities? Is the policy "necessary to achieve a substantial, legitimate, nondiscriminatory interest of the provider"? Landlords, if you're challenged on your policy, you must show a "nondiscriminatory reason" which is "clear, reasonably specific, and supported by admissible evidence." "Purely subjective or arbitrary reasons will not be sufficient to demonstrate a legitimate, nondiscriminatory basis for differential treatment."

Your Screening Policy May:

Look at individual circumstances for each applicant, if you want to give someone an exception to a policy which would otherwise deny them. Note: exceptions can't be based on an applicant's membership in a protected class. "Individualized assessment of relevant mitigating information beyond that contained in an individual's criminal record is likely to have a less discriminatory effect than categorical exclusions that do not take such additional information into account."

Deny potential tenants if they were convicted of the manufacture or distribution of drugs. "The Act does not prohibit 'conduct against a person because such person has been convicted ... of the illegal manufacture or distribution of a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802).'"

Check if a potential tenant qualifies based on other criteria (i.e., credit, housing history) before judging the safety of their criminal history."By delaying consideration of criminal history until after an individual's financial and other qualifications are verified, a housing provider may be able to minimize any additional costs that such individualized assessment might add to the applicant screening process."

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Nonrenewal due to criminal acts: HUD clearly states that their guidance applies to "cases in which a housing provider justifies an adverse housing action – such as a refusal to rent or renew a lease – based on an individual’s criminal history." Therefore, any policy about providing a nonrenewal to a tenant based on their criminal history would have to follow the same guidelines as above.

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Eviction due to criminal acts during a tenancy: We think there's some overlap in this set of guidelines, and topic areas covered by 2015 Wisconsin Act 176, as well as the Safe Housing Act. Here are their different roles:

2015 Wisconsin Act 176 gives landlords the right to give no-cure eviction notices for criminal activity. We haven't seen many of these cases go to court yet, so we don't know how judges are responding. Generally though, in order for a landlord to evict a tenant due to "criminal activity," the landlord must give some evidence about the criminal activity or “drug-related criminal activity” that occurred, the date it took place, and the identity or description of the individual(s) who engaged in the activity (law here). This law doesn't indicate any reason a landlord cannot choose to evict someone based on criminal activity, but HUD does does, so it's important to look at both of these together when issuing an eviction based on criminal activity.

HUD is asking landlords to have policies in place for denying someone housing, but not just during the application process. HUD says "this guidance addresses how the discriminatory effects and disparate treatment methods of proof apply in Fair Housing Act cases in which a housing provider justifies an adverse housing action – such as a refusal to rent or renew a lease – based on an individual’s criminal history." Since eviction is itself "an adverse housing action," it seems likely that this new HUD guidance applies to evictions.

Safe Housing Act: It's important to note that the Safe Housing Act (allowing landlords to evict perpetrators of domestic abuse/sexual assault/stalking, or releasing the survivors of abuse/assault/stalking from a lease) hasn't been impacted at all by 2015 Wisconsin Act 176, nor has it been impacted by this new HUD Guidelines, as far as we are aware. Wis. Stat. 704.16 allows a landlord to evict a tenant with a 5-day-no-right-to-cure notice, once certain conditions have been met. More at www.tenantresourcecenter.org/domestic_abuse_for_landlords.

It seems like it would be a good idea for landlords to set policies in advance of needing to evict someone for criminal activity. Some components to consider:

What kinds of criminal activity actively harms the property/residents?- You probably should make distinctions between different kinds of criminal activity. Find reasons with evidence (not just speculation) about what kinds of criminal convictions are the ones that endanger tenants/property. HUD is pretty clear that you can't just deny housing based on every kind of criminal activity. Make sure your policy looks at convictions, not arrests, for when something happens on your property. Alternatively, it may be possible to prove that criminal activity happened that did in fact already endanger tenants/property, and that the eviction is justified as a result. Burden of proof is lower in Small Claims Court than in criminal court - you just have to show that something reasonably happened in order to say that the person is a danger.- Exceptions are already in place for those who are perpetrators of abuse/sexual assault/stalking (Wis. Stat. 704.16 says that landlords must release "offending tenants" at the request of the victims of abuse, when certain proof is shown). Also, HUD says that it's okay to deny/exclude/fail to renew based on drug nuisance (drug manufacture or distribution according to definition in section 102 of the Controlled Substances Act (21 U.S.C. 802)).

How long ago did the crime occur? Policies must take into consideration how long ago a conviction occurred, based on evidence, not bias/speculation. (You might look at something like this.)

What exceptions are you willing to make? If you know that you're willing to make exceptions for people who are, say, in treatment, or supported by a sponsor, or supported by a case manager, then make that clear upfront. That way, you'll have support when you allow some folks to have another chance, but perhaps not everyone.

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Following your gut:

Whenever I talk to landlords about Fair Housing, one of the most frequent comments I hear is that a landlord wants to follow his/her gut to make decisions about tenants.

On one hand, as a person that does make quick decisions, I see the fairness of that. On the other, we see a lot of research that says that people have a lot of bias and error in these kind of "gut decisions" (here and here). Here at the TRC, we want to make sure the landlords who come to us for help are protected as they make these crucial decisions, and so we're asking you guys to think about what contributes to your decision making, and we'd like to challenge you to see if you can find better, more evidence-based ways to justify those choices. (Some pointers here.)

An example: We see a lot of landlords denying all tenants will any eviction record. They say that they don't want someone who will risk eviction in their units. Things these landlords might keep in mind:

If someone has never gotten evicted before, you don't know how they'd act if you did evict them. Will they prioritize their car payment over their past due rent? Will they pay? Will they try to work with you?

An devil's advocate position: someone who has lost housing before will better appreciate any housing they find, and will thus work harder not to lose housing again.

We tend to suggest that landlords look to the heart of what they want from a tenant. Perhaps it's that they want their tenant to pay rent? Then a landlord should look for evidence about rent payment history (can they afford rent now? How much is their current rent?), their income (and any income changes since there was last a problem), past money owed to a landlord.

A Second Example: A new landlord came to me recently and told me he liked to follow his gut in housing decisions. When I asked him to break it down, he said that he likes to rent to people who smile. I asked him about what would happen if someone couldn't smile due to a disability (like this), or if was a standard he subconsciously enacted more on women than men (many people do: more here)... Wouldn't that be illegal discrimination based on disability, or gender, both protected classes?

For him, it might be better to break it down to the heart of what he's looking for: perhaps a tenant who will be kind to other people (ask for: volunteering history, reference from a boss, or a personal reference), perhaps a tenant who will not complain about their neighbors (ask for: information from a previous landlord)... there's a lot of possibilities. But there's usually a way to get to the bottom of what landlords are actually seeking in a tenant.

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So, this is complicated! Feel free to contact us or the Fair Housing Council for more help figuring it out. Also! Did you know that we aren't attorneys here at the TRC? And this isn't legal advice, either. If what we've written doesn't sound right to you, consult with someone you trust. A list of housing attorneys is available here.

No part of this website should be regarded as legal advice, or replace an individual's responsibility to be familiar with the law. If you need legal assistance or representation, consult a Wisconsin housing attorney.